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National Labor Relations Board strikes pro-employer stance

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A memo sent by the National Labor Relations Board’s new general counsel, Peter B. Robb, to regional offices signals significant pro-employer changes from the agency, experts say.

The Dec. 1 memorandum distributed by Mr. Robb shortly after he took office indicates the board is likely to consider revising policies introduced during the Obama administration that greatly enhanced the agency’s oversight, including those involving employee handbooks and joint employers.

But they also note any board policy changes are likely to be gradual, as cases work their way up through the agency to the board level.

Experts say Mr. Robb, who acts essentially as the agency’s prosecuting attorney, will have a major influence on its direction.

Mr. Robb, a former employer attorney, was sworn in as general counsel Nov. 7 after being nominated by President Donald Trump in September. He replaces a former union lawyer Richard F. Griffin Jr., whose term expired in November.

At the same time, two Democrats on the board are being replaced by Republicans William Emanuel and Marvin E. Kaplan. The term of the acting NLRB chairman, Republican Philip Miscimarra, expires this month, but he will be replaced by a third Trump appointee, so the Republican majority will be retained.

In his memo, Mr. Robb asks regional officers to submit to the General Counsel’s Advice Office cases involving significant legal issues, including those “over the last eight years that overruled precedent and involved one or more dissents.”

The memo says decisions where this board may want to provide an “alternative analysis,” include those involving concerted activity, common employer handbook rules that have been found unlawful and joint employers, among others.

The memo also rescinds memos issued under the previous administration.

Experts say some NLRB rulings over the past several years have created considerable unhappiness in the employer community, but indications are the agency will now move in a more pro-employer direction and take a more balanced approach.

The memo “signals a retrenchment from the Obama era of decisions that were definitely leaning towards employees and labor unions,” said Barry J. Kearney, of counsel with Cozen O’Connor in Washington. Mr. Kearney, a former NLRB associate general counsel, spent 46 years at the agency before joining the law firm in August.

Mr. Robb is trying “to find cases that will present a factual record that will give the new board the opportunity to opine as to what their view is on the legal issues being presented,” said Michael Lotito, co-chair of Littler Mendelson P.C.’s Workplace Policy Institute in San Francisco. Mr. Robb walked into office “well prepared to do something of that magnitude that fast,” he said.

“A resounding signal is being sent … that there is a new sheriff in town and (the NLRB) will be much more open to alternative ways of looking at things,” which should be to employers’ benefit, said Steven M. Bernstein, regional managing partner with Fisher Phillips L.L.P. in Tampa, Florida.

It means “the agency is going to be more flexible in resolving cases, and not really seek to litigate every potential violation” of the National Labor Relations Act, said Patrick R. Scully, a member of law firm Sherman & Howard L.L.C. in Denver. “That’s a welcome development,” he said.

Observers say recent NRLB rulings on employee handbooks have focused on whether, regardless of whether the companies are unionized, they impinge on workers’ right to engage in “concerted activity” for “mutual aid or protection.” 

The Obama administration board took common rules on issues such as insubordination “and suddenly made them unlawful,” holding they restricted employees from exercising their rights, said Leigh Tyson, a partner with Constangy Brooks Smith & Prophete L.L.P. in Atlanta.

The new board will move to a “more middle-of-the-road approach to protected activity,” said Michael Starr, a partner with Holland & Knight L.L.P. in New York.

On joint employment, in a 2015 decision the NLRB overturned the standard in place since 1984 that firms must have “immediate and direct” control over a worker to be considered a joint employer. 

The issue has “caused an awful lot of concern in the management community in many ways” because there is now “just such a vague, elastic and ill-defined standard,” said Brian E. Hayes, a shareholder with Olgetree, Deakins, Nash, Smoak & Stewart P.C. in Washington.

These rules have had “the potential to really kill the whole franchise model,” said Ms. Tyson.

Mr. Kearney observed some change is to be expected with any new administration. The issue of whether graduate students fall under the NLRA, for instance, “has gone back and forth four times between different boards, and I suspect it’ll be addressed again.” The NLRB held most recently in 2016 they are covered under the act.

Changes will not be immediate, though, said Mr. Lotito. “It’s going to take time for these decisions to come out,” particularly because a replacement for Mr. Miscimarra has not yet been named.

Employers “shouldn’t make any abrupt changes until they see new developments,” advised Mr. Starr.